Can auction- and multiple bid targets be identified in the field of M&A?

Can auction- and multiple bid targets be identified in the field of M&A? This empirical study employs a binary logit model to identify the characteristics of companies that have been acquired facing a single bid or facing multiple bids from different bidders in the US during the period 2004-2009. The research extends the present research by looking at the differences in characteristics between acquired companies instead of investigating if the company will be acquired or not. The results reveal that companies that experience multiple bids have significantly different values regarding the EBIT margin, sales turnover and market to book ratio. Besides the characteristics of the companies, the premium paid and several control variables have been addressed. The findings suggest that companies that face multiple bids tend to have different characteristics however these results have to be placed in perspective in order to make correct judgments. Finally the findings have been related to the existing takeover prediction literature.

Autorentext

After obtaining his bachelors degree in business administration, Elmer finished his masters in financial management at the University of Tilburg, The Netherlands. Currently he is a corporate finance consultant at Accuracy The Netherlands,Amsterdam. Email: elmer.slag@gmail.com

Klappentext

Can auction- and multiple bid targets be identified in the field of M&A? This empirical study employs a binary logit model to identify the characteristics of companies that have been acquired facing a single bid or facing multiple bids from different bidders in the US during the period 2004-2009. The research extends the present research by looking at the differences in characteristics between acquired companies instead of investigating if the company will be acquired or not. The results reveal that companies that experience multiple bids have significantly different values regarding the EBIT margin, sales turnover and market to book ratio. Besides the characteristics of the companies, the premium paid and several control variables have been addressed. The findings suggest that companies that face multiple bids tend to have different characteristics however these results have to be placed in perspective in order to make correct judgments. Finally the findings have been related to the existing takeover prediction literature.